TMI Blog2019 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ther wholly or in a part the period of the delay attributable to him shall be excluded from the period for which interest is payable. If the third proviso as invoked by the respondents is not applicable and could not have been invoked, the entire calculation of the amount by wrongly excluding the period would be incorrect. The entire exercise will have to be undertaken afresh keeping in mind what has been observed by this Court in this judgement, more particularly, the fact that the third proviso could not have been invoked as the same is not applicable - In the peculiar facts of the case and also having regard to the fact that this is a long drawn litigation, this time we direct the Commissioner himself to look into the matter afresh - matter on remand. - R/SPECIAL CIVIL APPLICATION NO. 10531 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 10532 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 10533 of 2019 - - - Dated:- 28-8-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR. APURVA N MEHTA (7202) AND VIJAY H PATEL (7361) For The Respondent (s) : MS MAITHILI D MEHTA, ASST. GOVERNMENT PLEADER ORAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeks to challenge the order dated 03.08.2019 passed by the respondent No.2 under Section 54(1)(aa) of the Act, 1969, whereby the respondent No.2 granted interest on the refund amount from the date of deposit of the tax till the date of the assessment order excluding the period during which the appeals were pending. 2.2 It appears from the materials on record that the writ applicant is engaged in the manufacturing and selling of air conditioners, air coolers, its parts. The writ applicant is also is in the business of execution of turnkey contracts which involves design, supply, installation, testing and commissioning of the central air conditioning plants construed to be indivisible works contract. 3. The writ application at hand concerns the assessment period 1994-95. As the controversy in the case at hand is in a narrow compass, we may straightway go to the order passed by the Gujarat Value Added Tax Tribunal at Ahmedabad (for short the Tribunal ) in the Second Appeals preferred by the writ applicant. The Second Appeals were preferred by the writ applicant before the Tribunal against the orders passed by the Joint Commissioner of commercial Tax. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first appellate authority levying/ charging tax at the rate of 15% against the claim of the Dealer at 5%. In the meantime and during the pendency of the proceedings before the Tribunal, in another proceeding, including in the case of the very Dealer, the Hon ble Supreme Court held that the Dealer shall be entitled to interest under Section 54(1)(aa) of the Gujarat Sales Tax Act, 1969, on refund arising from the appellate order. Consequently, by impugned order, the learned Tribunal has allowed the appeals by holding that the Dealer shall be liable to pay tax at the rate of 5%. Therefore, as such, the impugned orders passed by the learned Tribunal wherein the appeals against the assessment order/ first appellate order are allowed. Therefore, on facts also, the decision in the aforesaid case shall be applicable. At this stage,it is required to be noted that as such, the State now cannot dispute that the Dealer was liable to pay tax at the rate of 5% only against which he paid 15% as per the assessment order. Therefore, the Dealer shall be entitled to the refund of differential amount and as the said amount was retained/ recovered by the State, the Dealer shall be entitled to inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on refund is kept in abeyance. 3.3 The Deputy Commissioner of Commercial Tax passed an order granting the refund but declined to grant any interest. In such circumstances, the present writ application came to be preferred before this Court. On 10.07.2019, this Court passed the following order : On 26.6.2019, this Court passed the following order : 1.00. Ms.Maithili Mehta, the learned AGP appearing for the respondents State submitted that the SLP preferred by the State is likely to come up for hearing before the Supreme Court on 01/07/2019. Ms.Mehta further submitted that the State would be pressing hard before the Supreme Court for stay of the operation, implementation and execution of the order dated 29/06/2018 passed by this Court in Tax Appeal Nos.748/2018 to 751/2018, respectively. 2.00. We take serious note of the fact that although the tribunal had issued directions with regard to the refund of the amount along with interest at the applicable rate way back in 2015, yet, the Tax Appeals against the said order of the Tribunal came to be preferred by the State after a period of three years bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be noted that as such, the State now cannot dispute that the Dealer was liable to pay tax at the rate of 5% only against which he paid 15% as per the assessment order. Therefore, the Dealer shall be entitled to the refund of differential amount and as the said amount was retained/ recovered by the State, the Dealer shall be entitled to interest on the refund. As such, the issue involved is directly covered by the decisions of the Division Bench of this Court referred to hereinabove. 3.00. Thus, the issue with regard to the entitlement of the claim of interest on refund under section 54(1) (aa) of the Gujarat Sales Tax Act, 1969 came to be set at rest by this Court in June, 2018. However, the SLP came to be preferred in April, 2019. We are informed that the Supreme Court has condoned the delay and the SLP has now been ordered to be posted for hearing. 4.00. If ultimately any interim order is passed by the Supreme Court, staying the operation of the order dated 29/06/2018 passed by this Court in Tax Appeal Nos.748/2018 to 751/2018, impugned in the SLP, it would be altogether a different scenario. However, as on date, the directions to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 046/-, whereas, for the assessment year 1996-97, interest has been calculated for an amount of ₹ 10,82,602/-. It is further required to be noted that the said interest has been calculated on total refund amounting to ₹ 3,50,43,672/- for all the assessment years which was paid by the respondent authorities on 10.10.2017. 3. I say and submit that in light of the order of the Hon ble Apex Court dated 08.04.2015, whereby, the Hon ble Court had held the petitioner liable to 5% of tax. Hence, the authorities herein had refunded the balance amount vide its order dated 10.10.2017. 4. I say and submit that vide order dated 03.10.2019, the respondent authorities have calculated interest on refund considering Section 54(1)(aa) proviso. For the sake of convenience, the Section 54(1)(aa) read with proviso is represented herein below : ( 1)(aa) Where refund of any amount becomes due to the dealer by virtue of an order of assessment under section 41, for the specified year, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest at the rate of twenty four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 1)(aa) Where refund of any amount becomes due to the dealer by virtue of an order of assessment under section 41, for the specified year, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest at the rate of twenty four per cent per annum, on the said amount from the date immediately following the date of closure of the accounting year to which the said amount relates to the date of order of assessment : PROVIDED that where dealer has paid any amount after the closure of the accounting year and such amount is required to be refunded, no interest shall be payable for the period from the date of closure of such accounting year to the date of payment of such amount : PROVIDED FURTHER that no interest shall be payable on the amount of refund which does not exceed rupees one hundred. Thus, considering the above two aspects, the authorities would be entitled to pay interest amounting to ₹ 70,83,338/- in all. The payment of the said amount of interest in under process. 3.5 The amount to be paid towards interest as determined by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year commencing from 1st October, 1993, or ( v) any such year thereafter. ( a) where an amount required to be refunded by the Commissioner to any person by virtue of an order of assessment under section 41 is not so refunded to him with in a period of thirty days of the date of order, or ( b) where an amount required to be refunded by the Commissioner to any person by virtue of any other order made under this Act is not so refunded to him within a period of ninety days of the date of the order, the State Government shall pay to such person simple interest at twenty four per cent per annum on the said amount from the date immediately following the expiry of the period specified in clause (a) or, as the case may be, clause (b) to the date of the refund : PROVIDED that no interest shall be payable where an appeal or revision application is filed or where an application has been made to the Tribunal to refer to the High Court any question of law. Explanation 1 : If the delay in granting the refund within the period specified in clause (a) or (b) is attribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o receive simple interest @ 9% per annum on the amount of refund from the date immediately following the date of closure of the accounting year to which the said amount relates to the date of order of assessment. 4.2 Mr.Mehta pointed out that the first proviso to Section 54(1)(aa) provides that is the dealer has paid any amount after the closure of the accounting year and such amount is required to be refunded, no interest shall be payable for the period from the date of closure of such accounting year to the date of payment of such amount. According to Mr.Mehta, since the writ applicant had made the payments during the year 2003 i.e. after the closure of the accounting year, the interest eligibility would commence from 2003 onwards as per the said proviso. However, according to Mr.Mehta, the respondents failed to take into consideration the provision of Section 54(1)(aa) and granted interest on refund only for the period of 842 days by excluding the period during which the appeals were pending and nor for the whole period from the date of payment till the date of the assessment order i.e. 01.04.2003 to 10.10.2017. 4.3 Mr.Mehta further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to sub-clause (1)(aa) of Section 54. 6.1 It is well established that the proviso of a statute must be given an interpretation limited to the subject-matter of the enacting provision . Reliance is placed on the decision of this Court rendered by four Judge Bench in Dwarka Prasad v. Dwarka Das Saraf (1976) 1 SCC 128 : (AIR 1975 SC 1758) , the relevant para 18 of which reads thus: 18. ... A proviso must be limited to the subject-matter of the enacting clause. It is a settled rule of construction that a proviso must prima facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent enactment. Words are dependent on the principal enacting words to which they are tacked as a proviso. They cannot be read as divorced from their context (Thompson v. Dibdin, 1912 AC 533). If the rule of construction is that prima facie a proviso should be limited in its operation to the subject-matter of the enacting clause, the stand we have taken is sound. To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AIR 1966 SC 459) it was held that the main object of a proviso is merely to qualify the main enactment. In Madras and Southern Mahrata Railway Co. Ltd. v. Bezwada Municipality (AIR 1944 PC 71), Lord Macmillan observed thus: The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. 6.4 The above case was approved by this Court in CIT v. Indo Mercantile Bank Ltd. (AIR 1959 SC 713), where Kapur, J. held that the proper function of a proviso was merely to qualify the generality of the main enactment by providing an exception and taking out, as it were, from the main enactment a portion which, but for the proviso, would fall within the main enactment. In Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subbash Chandra Yograj Sinha (AIR 1961 SC 1596) Hidayatullah, J., as he then was, very aptly and succinctly indicated the parameters of a proviso thus: 9....As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. In such circumstances referred to above, the order dated 03.08.2019 passed by the respondent No.2 is not sustainable in law and is hereby quashed and set aside. The entire exercise will have to be undertaken afresh keeping in mind what has been observed by this Court in this judgement, more particularly, the fact that the third proviso could not have been invoked as the same is not applicable. In the peculiar facts of the case and also having regard to the fact that this is a long drawn litigation, this time we direct the Commissioner himself to look into the matter afresh. The Commissioner shall look into the observations made by this Court as well as the chart of the calculation of the amount as provided by the writ applicant and which has been incorporated in this Judgement. We direct that let there be a fresh determination of the amount to be paid towards interest in light of what has been observed by us and discussed in this Judgement. The writ applicant shall be heard before the order is passed afresh. Let this exercise be undertaken at the earliest and a fresh order be passed within a period of four weeks from the date of receipt of this order. Rule made ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
